Coral Products confident, despite plunging into the red

Haydock plastics company Coral Products has suffered an almost £1m reversal in its pre-tax profits levels, but said it looks forward with confidence to an improved performance in the coming year.

Results for the year to April 30, revealed a pre-tax loss of £497,000, compared with a profit of £465,000 the previous year, despite achieving a 9.2% improvement in turnover of £24.4m.

The group blamed a poor performance at the Coral Products Mouldings division in the first eight months of the financial year.

However, the report said the division is now firmly established as an automotive parts supplier, with four major accounts.

Elsewhere, it declared it is a supplier of choice for a major online tote bag retailer, with supply orders running at present through to January 2019, while it has also re-established its position of being a major supplier of crates and food caddies into UK local authorities.

The business also revealed that it has a strong net assets position of £13.2m at the year-end, compared with £13.8m a year ago.

Chairman Joe Grimmond said: “We continue to invest in our group adding new and improved capacity.

“This is creating greater sales opportunities and we anticipate significant sales growth over the current financial year.

“Whilst I was pleased with the increase in revenue up 9.2% to £23.4m, the poor performance of Coral Products Mouldings during the first eight months of 2017-18 led to a reduced underlying operating profit of £0.9m (2017: £1.1m).”

Referring to the pre-tax loss, he explained: “The group has reported a loss before taxation for the financial year of £0.5m (2017: £0.5m profit).

“Across the group, finance costs have increased to £0.3m (2017: £0.2m) and depreciation to £1.2m (2017: £0.8m) in line with the increased spend on new, replacement and/or improvement of the assets of the group.

“Coral Products (Mouldings) was also affected by some one-off reorganisation costs of £0.5m during the financial year.”

But he added: “The group continues with its strategic progress of increasing focus on value-added and innovative products, particularly in the food container, recycling, telecommunications, rail industry, home delivery totes and blow moulding areas.

“Our focus is to build a significant plastic moulding business with a bias towards using recycled materials.

“We remain confident in our ability to do so via both improved internal performances of individual subsidiaries supported by strategic acquisitions in the short to medium term.

“We look forward with confidence to an improved performance in the coming year.”

Coral initially specialised in producing plastic CD, video and DVD cases, but the industry changed as consumers turned to downloading entertainment content, and the company switched to producing recycling bins for the food and garden industries.

In April last year it announced that it had been nominated to receive a new order for a sun roof moulding, having a value of around £500,000. to be produced within the firm’s recently established automotive division at Haydock.